Voglio sapere a riguardo di…

jbell on DSKJLSW7X2PROD with RULES2

13138

Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Rules and Regulations
to clients of smaller firms as well as larger firms.
We also believe that the rules disqualification provisions with respect to testimonials and endorsements will result in transparency and consistency for advisory clients, promoters, and advisers, as the provisions will generally eliminate the need for advisers to seek separate relief from the rule. In addition, as discussed above, we believe that our final rules placing guardrails on displays of performance will increase investor protection and the utility of the information provided and decrease the likelihood that it is misleading.
Establishing different promoter disqualification provisions or performance provisions for large and small advisers would negate these benefits. Also, as discussed above, our staff will use the corresponding information that advisers report on the amended Form ADV to help prepare for examinations of investment advisers.
Establishing different conditions for large and small advisers that advertise their services to investors would negate these benefits.
Regarding the second alternative, we believe the final rule is clear and that further clarification, consolidation, or simplification of the compliance requirements is not necessary. As discussed above, the final rule will provide general anti-fraud principles applicable to all advertisements under the rule; will provide further restrictions and conditions on certain specific types of presentations, such as testimonials and endorsements; and will provide additional conditions for advertisements containing certain performance information. These provisions will address a number of common advertising practices that have not been explicitly addressed or broadly restricted e.g., the current advertising rule prohibits testimonials concerning the investment adviser or its services, and direct or indirect references to specific profitable recommendations that the investment adviser has made in the past. The proposed provisions will clarify and modernize the advertising regime, which has come to depend on a large number of no-action letters over the years to fill the gaps.
Regarding the third alternative, we determined to use a combination of performance and design standards. The general prohibitions will be principlesbased and will give advisers a broad framework within which to determine how best to present advertisements so they are not false or misleading. There will also be the principles-based requirement that an adviser must have a reasonable basis for believing that a
VerDate Sep<11>2014

21:12 Mar 04, 2021

Jkt 253001

person providing a testimonial or endorsement has complied with the final rule. We believe that providing advisers with the flexibility to determine how to implement the requirements of the rule allows them the opportunity to tailor these obligations to the facts and circumstances of their particular arrangements. The final rule will also contain design standards, as it contains additional conditions for certain third-party statements, and certain restrictions and conditions on performance claims. These restrictions and conditions are narrowly tailored to prevent certain types of advertisements that are not a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 2064 of the Act from misleading investors. The corresponding changes to rule 2042 and Form ADV are also narrowly tailored to reflect the final rule.
We also considered an alternative that would not have included design standards, and that would have relied entirely on performance standards. In this alternative, as discussed in the Economic Analysis at section III above, we would reduce the limitations on investment adviser advertising, and rely on the general prohibitions to achieve the programmatic costs and benefits of the rule. As discussed in the Economic Analysis, we believe that many of the types of advertisements that would be prohibited by the final rules limitations have the potential to be fraudulent or misleading. We do not believe that removal of the limitations on advertisements we are adopting would, in comparison with the final rule, permit advertisements that would not be inherently fraudulent or misleading. In addition, we believe that the removal of limitations may create uncertainty about what types of advertisements would fall under the general prohibitions.
Statutory Authority The Commission is adopting amendments to rule 20641 under the Advisers Act under the authority set forth in sections 203d, 2064, 211a, and 211h of the Investment Advisers Act of 1940 15 U.S.C. 80b3d, 10b 64 and 80b11a and h. The Commission is rescinding rule 20643
under the Advisers Act under the authority set forth in sections 203d, 2064, 211a, and 211h of the Investment Advisers Act of 1940 15
U.S.C. 80b2d, 80b64, and 80b 11a and h. The Commission is adopting amendments to rule 2042
under the Advisers Act under the authority set forth in sections 204 and 211 of the Investment Advisers Act of
PO 00000

Frm 00116

Fmt 4701

Sfmt 4700

1940 15 U.S.C. 80b4 and 80b11. The Commission is adopting amendments to Form ADV under section 19a of the Securities Act of 1933 15 U.S.C. 77sa, sections 23a and 28e2 of the Securities Exchange Act of 1934 15
U.S.C. 78wa and 78bbe2, section 319a of the Trust Indenture Act of 1939 15 U.S.C. 7sssa, section 38a of the Investment Company Act of 1940
15 U.S.C. 80a37a, and sections 203c1, 204, and 211a of the Investment Advisers Act of 1940 15
U.S.C. 80b3c1, 80b4, and 80b 11a.
List of Subjects in 17 CFR Parts 275 and 279
Reporting and recordkeeping requirements; Securities.
Text of Amendments For the reasons set out in the preamble, title 17, chapter II of the Code of Federal Regulations is amended as follows:
PART 275RULES AND
REGULATIONS, INVESTMENT
ADVISERS ACT OF 1940
1. The authority citation for part 275
continues to read in part as follows:

Authority: 15 U.S.C. 80b2a11G, 80b 2a11H, 80b2a17, 80b3, 80b4, 80b 4a, 80b64, 80b6a, and 80b11, unless otherwise noted.

Section 275.2042 is also issued under 15
U.S.C 80b6.

2. Amend 275.2042 by a. Revising paragraphs a7iv, a11, 15, and 16; and b. Adding paragraph a19.
The revisions and addition read as follows:

275.2042 Books and records to be maintained by investment advisers.

a
7
iv Predecessor performance as defined in 275.20641e12 of this chapter and the performance or rate of return of any or all managed accounts, portfolios as defined in 275.2064
1e11 of this chapter, or securities recommendations; Provided, however:
A That the investment adviser shall not be required to keep any unsolicited market letters and other similar communications of general public distribution not prepared by or for the investment adviser; and B That if the investment adviser sends any notice, circular, or other advertisement as defined in 275.20641e1 of this chapter
E:FRFM05MRR2.SGM

05MRR2